Music City Star’s Rail Authority Gets Time On Loan Payment

The Music City Star commuter train, which runs from Nashville to Lebanon on the tracks of the Nashville & Eastern Railroad Authority. Image via MusicCityStar.org

The Music City Star has a little more breathing room before an important loan comes due for the railroad authority in charge of its tracks.

The Nashville & Eastern Railroad Authority faced a bank loan this month that it couldn’t pay, but now says it has at least until April.  By then, state lawmakers hope to rework how train companies are taxed for diesel fuel, giving the authority a path toward stabilizing its finances.

Short line railroads in Tennessee (WPLN feature) haul everything from commuters—like the Music City Star—to parts of cars and barges, to fertilizer.  Money for maintaining the tracks comes from a tax on diesel for trains—at least, it did, until a lawsuit last year prompted the state to freeze that money.

That spelled trouble for Nashville & Eastern, which is in charge of the tracks for the Music City Star.  Val Kelley manages the Authority, which owed about a quarter of a million dollar loan payment this month to First Tennessee Bank.

“If they started saying hey, we’re calling this in, here’s what belongs to us, blah blah blah… We would have a total mess.  And the Music City Star would have a problem.”

On Friday, the bank accepted an interest-only payment around $40 thousand, and Kelley says they’ll revisit the loan after lawmakers get a chance to rework the diesel tax, possibly shifting it from a percentage to a flat per-gallon tax.  Still, there might not be any new money for maintaining the state’s short lines (PDF) ‘til next year.

And for the Nashville & Western short line, where a decrepit wooden trestle crossing Old Hickory Boulevard is on its last legs, it’s not clear they can hold out that long.

Northwest of the city, the Nashville & Western Railroad Authority had hoped to replace a decrepit wooden trestle, but the court’s ruling last year stalled a way to fund the upgrades. Since then, engineers have spent tens of thousands on temporary measures to hold the old woodwork together. (Image: CSR Engineering / Jeff Wilson)